PAPER NO.10 LAW GOVERNING CREDIT PRACTICE
GENERAL OBJECTIVE
This paper is intended to equip the candidate with the knowledge, skills and attitudes that will enable him/her to apply principles of credit law in an organisation.
LEARNING OUTCOMES
A candidate who passes this paper should be able to:
- Identify the securities available in lending
- Comply with the procedures and methods of creation of securities
- Identify the rights and duties of lenders and borrowers
- Demonstrate knowledge of Bankruptcy and Insolvency
CONTENT
Introduction to securities
- Meaning of a security
- Types of securities
- Advantages and disadvantages of collateral
- Formation of the contract
- Qualities of a good security
- Enforcement and perfection of securities
Land as security
- Meaning of land
- Land tenure: freehold and leasehold
- Advantages and disadvantages of land as security
- Creation of charges and mortgages
- Procedure for perfecting title to land as security
- Rights and duties of the parties to a charge and mortgage
- Remedies
- Release of security
Intellectual property as collateral
- Meaning of intellectual property
- Types of intellectual property
- Procedures for perfecting a security interest in intellectual property
- Advantages and disadvantages of using intellectual property as
- Rights and duties of the parties
- Remedies
- Discharge of security
Chattel securities
- Meaning of a chattel
- Creation of chattel mortgages
- Parties to a contract of chattel mortgage
- Rights and duties of the parties
- Remedies
- Discharge
Guarantees and Indemnities
- Meaning and characteristics
- Formation
- Rights and duties of the parties
- Common clauses in guarantee and indemnity
- Termination of guarantees and indemnity
- Advantages and disadvantages of guarantees and indemnities
Bailment, pledge and lien
- Meaning and characteristics
- Formation, rights and duties of the parties
- Remedies for breach, termination
Corporate securities
- Meaning and characteristics
- Debentures
- Charges
- Remedies of a debenture holder
- Shares and corporate bonds
- Common clauses in corporate bonds
Government borrowing
- Treasury bills
- Treasury bonds
- Borrowing by County Government
Regulatory Framework for lending institutions (excluding banks)
- Co-operative societies
- Savings and credit cooperative societies (Sacco’s)
- Micro finance institutions
- Mobile money transfer services industry
- Prudential Guidelines for lending Institutions
Corporate governance
- Meaning of corporate governance
- Importance of corporate governance
- Principles of corporate governance
- Best practice in corporate governance
- Role of Stakeholders (Shareholders, Board of Directors, Government)
- Conflict ofiInterest
- Investor education and protection of shareholders
Consumer Protection in Credit Agreements
- Credit card agreement
- Disclosure
- Unauthorised charges
- Insurance
- Correcting of errors
- Deferral of payments
- Default charges
- Prepayment
Emerging issues and trends